Linda Riordan promises to pay back profit on flat sale after renting to fellow Labour MP

A Labour MP who claimed thousands of pounds in London rental costs while
letting out her own flat to another MP has promised to sell the property and
return any profit to the taxpayer.

By Rowena Mason, Political Correspondent

5:11PM BST 22 Oct 2012

Linda Riordan, MP for Halifax, placed her flat on the market after Daily Telegraph revealed 27 MPs have been claiming London rental expenses when they already own a property in the city.

The Independent Parliamentary Standards Authority says this practice among politicians is "an issue of their own private financial affairs" but it is preparing to review the rules around MPs renting from each other.

In the case of Mrs Riordan, she has been charging a colleague, Iain McKenzie, around £1,560 per month to live in her flat, which has a mortgage of approximately £500 per month.

She was simultaneously claiming £1,450 per month from the taxpayer to cover her own rental costs for another London flat.

Following revelations about her arrangement, Mrs Riordan said she has asked Mr McKenzie to move out "as soon as practically possible".

A spokesman for the MP said she took the decision "to provide some transparency to the arrangements which perhaps wasn't there prior to the weekend".

He said Mrs Riordan had come to the decision independently and there had be no pressure from the Labour Party or the parliamentary expenses watchdog.

In a statement, Mrs Riordan said: “I purchased my London flat in 2006 for £300,000 paying a deposit of £30,000 and £9,000 stamp duty.

“This was only done by remortgaging my family home in Halifax, that I jointly owned with my late husband. There remains £250,000 owing on the flat.

“When the Independent Parliamentary Standards Authority (Ipsa) was introduced in 2010, I immediately tried to sell my flat - I received no offers. I took advice and was advised to rent out the property by Ipsa.

“From rental received in the last 12 months, I have paid £5,000 in estate agents fees and £2,000 in service charges and other costs.

“I have decided to place the flat on the market this week, and after speaking to Iain Mckenzie this weekend (the person renting the flat) he has agreed to move out as soon as is practically possible.

“I have always abided by the rules. Furthermore, I have agreed to pay Ipsa back any capital gains. I will, on the assumption that my flat sells, pay any profit to the taxpayer. Of course I cannot speak for other MPs or ex-MPs who are or may continue to make profits.”

Mrs Riordan bought the London flat with the help of the taxpayer by claiming £35,000 in mortgages interest costs from 2007 to 2010, until the practice was banned. She also claimed £1,310 for a sofabed, £220 for curtains and £1,936 for carpets.

Mr McKenzie, who was elected after a by-election in Inverclyde, said he had been advised by Ipsa that the rental was within the rules. He does not profit from the arrangement.